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Thursday, 11 October 2012

Great Britain's future must lie within a federal Europe

On Monday night I went to the LSE to attend an absolutely fascinating event. It was the launch of a new book (in every major European language) entitled FOR EUROPE: A Manifesto for a Post-National and Federal Europe.

The authors and speakers at the event were Daniel Cohn-Bendit MEP, Co-Chair of the Greens/European Free Alliance in the European Parliament and a former Parisian student leader, and Guy Verhofstadt MEP, a Thatcherite and former Prime Minister of Belgium.

It'd be impossible for me to recount the full detail of what they said but I will say that, coming as they did from two very different political perspectives, they ended up utterly convincing me of the need for European federalism.

And here's why. There were two key arguments that were made which spoke to me.

The political and financial crises facing Europe

The first was that it's the only solution to the political and financial crisis facing Europe. Guy Verhofstadt pointed out that when the United States first came into being the national government had no financial powers at all and that this then gradually moved to federal government gaining the power to issue treasury certificates, then the establishment of the Federal Treasury in 1790 (seven years after the end of the American War of Independence), with a national currency not being introduced until 1792.

He then compared this to the way in which the Euro was brought in without the existence of any kind of treasury or central taxation or other essential financial instruments to back it up and explained that this was the origin of the eurozone crisis - monetary integration without economic or financial integration. And, what's more, he pointed out that the USA has a national debt of 102% of GDP and has to pay interest rates of 2% on that debt and that Japan has a national debt of 226% of GDP but pays just 1% while the eurozone has an average debt of 88% but has to pay average interest rates of 5% and that this is the consequence of a currency without any reliable financial instruments to back it up.

To put it another way, the American dollar is backed by a federal government with a budget of 24% of GDP. The EU has a budget of 1%.

And this lack of financial substance, and the eurozone crisis it has produced is compounded, both Verhofstadt and Cohn-Bendit said by a political failure of European leaders to tackle the problem and the way in which they always delay decisions for too long and only ever adopt half measures at the last possible moment leading to a lack of confidence which is the real cause of the eurozone crisis. And the cause of this political crisis was that the EU operates on a principle of unanimity - where every country has to agree to a solution before it can be adopted, leaving the entire stability of the EU dependent on what they termed as the "tyranny of the one".

The argument they made, quite convincingly, that the only solution to this could be through federalism to provide a democratic European government, with two chambers, the mutualisation of Europe's debt, a European treasury and a single European currency. Verhofstadt described the only options for the future are either forwards to a United States of Europe or backwards to the divided nations of Europe.

But there are plenty of people who would be perfectly happy to return to the different nations of Europe, to see the eurozone breakup and to see the EU return to it's earlier form of nothing more than an economic trading agreement between the countries of Europe. And, given that that could feasibly happen as well, then obviously this means that federalism is not the only solution to the financial and political crisis within the EU.

We need a federal Europe to survive the new age of empires

But this is where I found their second argument much more important and convincing.

Put simply, in thirty years not a single European country will be a member of the G8 anymore. They will be overtaken by Brazil, India, China and the rest of the industrialising world and it will be these nations, along with the United States that decide the future of the world and disunited European nations will lose the influence they currently have.

So the simple question facing everyone in Europe is whether we want to make the decisions ourselves or whether we want these other nations to decide for us.

With the globalisation of the economy, markets have grown bigger and more powerful than the nation state, eroding national sovereignty. And, just as with climate change, these kind of problems require global solutions and global regulations to tackle them and it simply will not be possible for individual nations to achieve this.

The nation states of Europe emerged out of the need for the political power to regulate and control the emergence of national economies and the same is needed now to give us the power to regulate and control the new global and regional markets. And so a reformed European Union is the only way for us to safeguard ourselves against the power of the global markets.

We're entering a new age of empires. Not the old kind of empire but a new kind. Empires not of countries but of entire civilisations. China and India aren't just countries, they're also entire civilisations - each containing many ethnicities, languages and religion but all united by a shared culture and civilisation. The same applies to America - the original melting pot and a country where different ethnicities and religions and languages have always been melded together to form an overarching American identity. And the world of the future will be dominated by these new empires.

So the only way that the people of the nations of Europe can avoid being powerless bystanders in a world shaped by other cultures and other civilisations is to put a measure of our national sovereignty together to defend our civilisation and to defend our culture.

After all, despite our differences, the nations of Europe have much more in common with each other than they do with the rest of the world. A commitment to human rights and liberty and tolerance unseen in China or India. A commitment to social protection for the vulnerable of a kind lacking in America. A culture of political pluralism and compromise very different to the partisan feuding of America. And our culture and civilisation is every bit as worthy of promoting and defending as the cultures of China and India and America.

An example of how sharing sovereignty makes us stronger is defence. Between them the nations of Europe have 1.5 million soldiers - a military larger than that of the USA. But Europe's soldiers, as a whole, operate with less than 10% of the efficiency of that of the USA. During the Libyan intervention, after two days France and Great Britain ran out of ammunition and had to buy more from the Americans. So, despite Europe having a military larger than that of the most powerful nation on Earth, it is many, many times weaker due to each nation having it's own army, duplicating the work of every other nation rather than pooling resources together to provide economies of scale and to provide much better security at a much lower cost. A federal Europe could well have a military with a fraction of the numbers Europe has at the moment at a lower cost but one which actually provided much more security than the individual armies of Europe have at the moment. After all, Britain and France currently both struggle to fund even one aircraft carrier each when a pooling of European resources could afford more aircraft carriers at a lower cost to the taxpayers of each individual nation.

And, looking at things another way, why do we need 27 European embassies in Kuala Lumpur? We could have one single European embassy with a lobby for each European nation at a fraction of the cost.

Ultimately, working together with other people makes us stronger than working alone. And that's the key element of a federal Europe that I myself can believe in. In the 21st century the 19th and 20th century notion of the nation state simply cannot defend us nationally, culturally or financially. It will take a new model of a federation of the nations of Europe to do that in our modern world.

How it could happen

Cohn-Bendit and Verhofstadt weren't just there with a vision of what could happen though, they were also there with a blueprint of how we could move to a federal Europe. They also pointed out that for it to work it will take politicians to stand up and lay out the new vision of Europe and to convince people of it - instead of following the method of the French revolutionary who said "I must find out where my people are going so that I may lead them!".

The first step they suggested would be the 2014 European elections. Ideally it should be a break from the previous squabbles on national issues between national parties in each country and instead a switch to a proper debate on the future of Europe between transnational European parties. But, since that is unlikely, a very minor change to the EU's electoral law could allow a candidacy for the existing European presidency to stand in every single country. However, the ideal solution should be the introduction of two ballot papers for voters - one to elect MEPs and one to elect the President of the European Commission.

And if the President of the Commission were directly elected, instead of being rotated between different nations as it is at the moment, then the president would have the legitimacy to challenge the nations on an equal footing and to move away from the current system of horse trading by national governments behind closed doors without any democratic input.

The next step would be to call a constitutional convention on the European level which should produce a constitution, no more than 20 pages long, laying out the raison d'etre of Europe, establishing how it would work, making the Euro the currency of Europe, establishing a self-financing federal government and including fundamental human rights.

This should then be put to the people of Europe in a referendum because it is the people who have the right and the responsibility to decide the shape of their future.

And, if the majority of people and the majority of states say yes to the constitution then it should be implemented. Those countries which reject the constitution would have to choose between staying in the EU and accepting the democratic will of the majority or leaving the EU completely. A Europe fragmented on different lines on every policy area (currency, trade, agriculture, etc) with some nations in and some nations out simply won't work.

So, for example, us in Great Britain would have to decide whether we want to be part of the new EU or whether we wanted to become the 51st state of the USA. What can't continue is people like David Cameron saying to the rest of Europe that he'll veto the European budget necessary to tackle the financial crisis because it will cost the UK money but that he also wants all the benefits of EU membership. Each country should have to decide whether we want to be in or out.

Both Cohn-Bendit and Verhofstadt both freely admitted that there would be many difficulties in putting together the different political and governmental cultures of Europe which is why they advocated a policy of convergence: a federal Europe shouldn't take over from national governments and say pensions have to be this much, taxes have to be that much, welfare has to be this other amount because it simply won't work with all the national variations throughout Europe.

Instead, the federal government should specify minimum and maximum boundaries for each policy area - for example a minimum standard of social provision - as well as promoting best practice across Europe. And, where states can't match those minimum standards (such as Greece at the moment) the rest of Europe should show solidarity with them and the federal government should step in to provide that minimum standard while helping the nation get to the state where it was capable of providing that minimum standard itself once more.

This, I think, is the crucial thing about a federal Europe. It should not be about a massive, undemocratic, unaccountable superstate trying to force uniformity on everybody. Because, in many ways, that's the problem we have with the partial democracy of the EU at the moment. Instead it should be about making the EU properly democratic and accountable and controlled by the people of Europe through proper democratic systems and through sharing sovereignty where, and only where, doing so makes us stronger.

As Cohn-Bendit and Verhofstadt said:

"To us a federal Europe is democratic and accountable. It
does not mean the nation state disappears but it does mean you have a new
balance of serenity."

And that is a vision which speaks to me. And it's one I am convinced of and which I will support from now on. The time has come for a new Britain and a new Europe and I'm going to go out and fight for it.

5 comments:

"The first was that it's the only solution to the political and financial crisis facing Europe."

Yes, a federal europe is the only solution to the distress of a monetary union that is not an economic union. However, this need not involve any EU nation outside the eurozone.

"To put it another way, the American dollar is backed by a federal government with a budget of 24% of GDP. The EU has a budget of 1%."

Well quite, and up to 5% of GDP would have to be sloshed from rich nations to poor, is there a mandate for that?

"Put simply, in thirty years not a single European country will be a member of the G8 anymore. They will be overtaken by Brazil, India, China and the rest"

There is plenty of evidence that Britain will remain in the top ten, both in nominal terms and in per-capita, in fact some surveys show Britain becoming the largest economy in europe by 2050, and sixth in the world. Remember, the G8 used to be the G7, and by 2050 that may well have become the G10. There will remain room for Britain at the top table.

"A federal Europe could well have a military with a fraction of the numbers Europe has at the moment at a lower cost but one which actually provided much more security than the individual armies of Europe have at the moment."

It might for 'europe' but what about the nations within europe? It isn't just economies of scale, it is the converged political will to employ that military force in elective warfare. Without the converged political will such decisions are not made, and foreign policy is not exerted. If ever there was a tyranny of the majority argument this is it, at least for those nations that have a historic tolerance for interfering in the affairs of other countries, cough; "britain".

"So, for example, us in Great Britain would have to decide whether we want to be part of the new EU or whether we wanted to become the 51st state of the USA."

That is a straw-man, our weight in international affairs has in recent history derived from our function as a fulcrum between america and europe, with either party seeking to influence us so that, in turn, we might influence the other.

"This, I think, is the crucial thing about a federal Europe. It should not be about a massive, undemocratic, unaccountable superstate trying to force uniformity on everybody."

No? For that is more or less what you have prescribed in the quote above; conform or get out! I would argue for the opposite; a converged euro-core as federated as might choose to become, with room for those on the periphery that wish to remain sovereign nation-states.

In short - a europe or variable geometries, existing within an EU commission governed single market for all parties.

Yes, a federalised europe needn't necessarily involve any members outside the eurozone but the problem with that is that you'd then end up with countries like the UK, which are outside the eurozone, retaining a veto over the affairs of those countries within the eurozone which is obviously completely unfair and undemocratic. So the only alternative model would be a separate federal organisation for eurozone members but, as every country in the EU apart from the UK and Denmark have pledged to join the euro, then such an organisation would end up usurping all the functions of the EU so you'd still end up with non eurozone countries having to decide whether to stay in the EU and join the euro or to stay out of the euro and leave the EU.

Your point about a mandate is, in fact, the entire point of a referendum on a constitution, the election of the president and a two chamber federal government. You give people a choice of whether to provide a mandate to a governmental system including redistribution or you do not. That's democracy.

If there are any models which predict the UK, with a smaller population than Germany, overtaking Germany's economy by 2050 then I highly doubt those models are realistic. But yes, the UK might remain in the top tier of nations without being part of a federal Europe. But if it does it will be at the bottom of a top tier and will probably have less clout than if it were instead a leading voice in what would be the largest economy in the world.

Um yes, if you have a common defence policy and a common foreign policy, democratically accountable to the people then yes the will of the majority on foreign policy will prevail over the minority. Just like in the UK elements of our national defence policy such as Trident are maintained against the majority will of constituent nations such as Scotland. But that's democracy.

And, for purely defensive purposes, a European military would undoubtedly offer us greater security to being much larger and more effective than we can manage individually. Foreign policy is a different matter but so far the EU has generally shown a tendency to be just as interventionist (though primarily through economic means) as the UK has been. But again, this is democracy. If you have a democratic federal government then the majority will of the people will prevail.

Yes, our weight has derived in part from being a fulcrum of the USA and the rest of Europe - though our influence in Europe is actually diluted due to us being perceived as too closely tied to the US. But this would not be the case if the rest of Europe were to federalise. Do you really think that a federal Europe would tolerate a non-member trying to interfere with the democratic will of the people of the federation? No, of course not.

We would find ourselves being shut out of Europe so our only options would be closer and closer cooperation with the US in order to maintain our foreign policy clout.

As I've said, I simply don't think a two tier Europe with a federalised core consisting of all but one or two of the EU countries simply won't, in the long term, be able to practically continue with a couple of disassociated nations insisting on influence over the core's internal affairs. So ultimately it would have to end up either shedding or absorbing those peripheral nations.

So that's my point. Each nation, especially us, would have to make a decision for ourselves as to which future we want to follow. As a country, I've no doubt we could survive outside a federal Europe. But, by the same token, I think that we would be better off and able to do more within a federal Europe. So when the time comes to make that choice I will argue for the latter option.

And, I'm sorry, but you are fundamentally misunderstanding the nature of democracy. Modern democracy means that the will of the majority is what makes decisions. This might be slightly unfair on the minority but it is a vast improvement on the will of the minority taking precedence over that of the majority.

In short, a two tier Europe is not sustainable. And the people and the nations of Europe will all have to make the decision ultimately of whether to become part of a democratically run federation of nations with all that that entails or to leave.

"the only alternative model would be a separate federal organisation for eurozone members but, as every country in the EU apart from the UK and Denmark have pledged to join the euro"

This has yet to be seen. I remain far from convinced that all of the euro17 will agree to accept the losing the power of the purse, and the EU is going to get bigger. It would be quite possible to create a europe of variable geometries, and one that is large enough to justify its existance, a 3:1 split perhaps, particularly as there would then be little purpose in the EFTA members not joining the extra-EU.

"If there are any models which predict the UK, with a smaller population than Germany, overtaking Germany's economy by 2050 then I highly doubt those models are realistic."

Population is kind of the point, Germany has a population crisis approaching and we retain a higher GDP/capita than Germany to start with.

There are four recent (i.e. post crisis), economic projections out to 2050 contained here if you are interested:

"Um yes, if you have a common defence policy and a common foreign policy, democratically accountable to the people then yes the will of the majority on foreign policy will prevail over the minority."

Will the minority actively seek a new model of governance that ensures that their preferences are less likely to be adopted in future? The more contentious the policy area, the more likely the answer will be no, and choosing when you are willing to sacrifice blood and treasure is just about the most contentious area I can imagine.

"Yes, our weight has derived in part from being a fulcrum of the USA and the rest of Europe - though our influence in Europe is actually diluted due to us being perceived as too closely tied to the US. But this would not be the case if the rest of Europe were to federalise."

Why on earth not? Does europe not seek to use us to influence US policy making? As long as we remain a significant military and economic actor we will be sought to add multilateral legitimacy to the interventions of either partner. That is leverage.

"So that's my point. Each nation, especially us, would have to make a decision for ourselves as to which future we want to follow."

Only because the current destructive doctrine of ever-closer-union demands unanimity to encourage the image of relentless 'progress'. It would be quite possible to create a basic tier focused on compliance with the single market, and an advanced tier for compliance with the newly converged euro-core. It would even be possible to have additional common projects that outer members could choose to apply in addition to basic criteria, the same for inner members, and even across tiers.

A europe of variable geometries.

More practically, Britain isn't going to join the euro-core in the next ten years, at the very least, so it is a simple question of whether you want us in at all!

I am happy to address most contributions, even the drunken ones if they are coherent, but I am not going to engage with negative sniping from those who do not have the guts to add their names or a consistent on-line identity to their comments. Such postings will not be published.

Anonymous comments with a constructive contribution to make to the discussion, even if it is critical will continue to be posted. Libellous comments or remarks I think may be libellous will not be published.

I will also not tolerate personation so please do not add comments in the name of real people unless you are that person. If you do not like these rules then start your own blog.

Oh, and if you persist in repeating yourself despite the fact I have addressed your point I may get bored and reject your comment.

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